Access to Medicine: The issue, the Foundation, and the investor call-to-action
Member Musing – Australian Ethical
COVID-19 has focused the mind on health-related sustainability issues. It was no surprise then to see strong investor support for a call launched in February for fair global access to vaccines and other health technologies and equipment to fight the virus.
10 Australian investment managers and super funds signed up alongside 150 global investors – and the statement is still open for signature. As well as calling for improved government funding, supporting investors commit to engage with companies to accelerate research, production and equitable pricing and distribution of vital healthcare.
Australian Ethical supported the statement as a major healthcare investor focused on companies which pursue important medical progress and take care to ensure their research, production and marketing are conducted responsibly.
Benefits in reducing inequality
The February statement recognised both the ethical and financial case for fair access to medicine, citing economic research into the drag on recovery of advanced economies expected if infection continues to spread in emerging markets. Whether the issue is climate or COVID, the global co-dependence of fair, stable societies and thriving economies is clear.
The pandemic has triggered general reflection by responsible investors on the role they can play in promoting a pharmaceutical and healthcare sector which functions fairly and effectively. It has provided a strong reminder that impact comes in different shapes and sizes. At this time vaccination for people living with poor access to hospitals and without sick leave or social welfare entitlements will have far greater impact than vaccination for most Australians. The same can be said for many other medicines and health services.
Promoting greater access to medicine
The February investor statement was organised by the Access to Medicine Foundation which has been working on equitable healthcare since 2003. Its reports and work with health experts, industry and governments offers powerful support for investors looking to understand key issues and opportunities for influence. Its research covers company trends, risks and performance across three areas:
– Equitable access to medicine, including in R&D, pricing and licensing
– The control of antimicrobial resistance, an issue of increasing importance as many healthcare and agricultural practices foster ‘superbugs’ and other treatment-resistant bacterial and fungal diseases
– Access to vaccination for all children, including in the poorest and most remote communities.
For example, the Foundation’s 2021 Access to Medicine Index found that while eight companies systematically address access to medicine for all new products, less than half of key products are covered by pharma companies’ access strategies in poorer countries. Unsurprisingly perhaps but also of great concern was the finding that while R&D for COVID-19 has increased, other pandemic risks remain unaddressed.
Lessons for responsible investors
The Foundation’s indices, reports and other studies are invaluable resources for investor understanding and engagement. The Foundation also provides practical advice and support, coordinating many company engagements which facilitate investor access to informed discussions with companies on these complex issues.
Both the work of the Access to Medicine Foundation and the pandemic provide many enduring lessons for responsible finance, in closing here are just two:
1. Whether it’s inequality, climate, tax evasion, modern slavery or pandemics, responsible investors need to adopt an international perspective as we apply our levers of influence in capital allocation, engagement with companies and governments, and the exercise of our public voice to raise understanding of our shared interest in crafting lasting global solutions to these urgent challenges.
2. The financial sector has a responsibility to apply its ample intellectual fire power to develop products and services that generate sustainable value.
During 2020 we saw vaccine and other social bonds issued to raise funds for vaccine research, production and distribution. There’s great further opportunity for the design of financial products with impact-linked returns to help drive innovation to deliver healthcare benefits to the people who need them most.
This can be research into vaccines and treatments for diseases like malaria, cholera and dengue fever which persist in many lower income countries but which often fail to attract R&D investment because of lower capacity for governments and citizens to pay.
Innovation is also important in the delivery of medicine and treatment to communities who currently have limited healthcare access. Linking to the previous lesson, this is an area where investors can help catalyse contributions from industry, civil society and government to enable capital allocation at scale for enduring impact.
Stuart Palmer (BA, LLB, MLitt, PhD), Head of Ethics Research, Australian Ethical Investment.
Australian Ethical Investment is a leading ethical investment manager, attracting a growing number of Australians expecting their investments to provide both competitive returns and positive change for society and the environment. Established in 1986, today Australian Ethical manages over $5 billion in superannuation and managed funds for over 60,000 Australians. Stuart evaluates the impacts which companies’ products, services and operations have on people, animals and the environment. He also contributes to Australian Ethical’s engagement and advocacy for more sustainable business and investment models and practices.